Proposal would give urgent care center 90 percent tax break its first year

Tuesday

Nov 26, 2013 at 12:10 AMNov 26, 2013 at 5:46 AM

A proposal before the City Council would cut property taxes for the under construction Saint Anne's Hospital urgent care facility at Riverside Landing by about $143,000 over five years.

MATT CAMARA

NEW BEDFORD — A proposal before the City Council would cut property taxes for the under construction Saint Anne's Hospital urgent care facility at Riverside Landing by about $143,000 over five years.

"This helps, it gives us some relief," said developer Mark Dickinson, whose company is building the 10,000-square-foot medical facility. "It's an important component of the puzzle of putting this project together."

The Coggeshall Street urgent care center is a collaboration between Saint Anne's and Hawthorn Medical Associates, both of which are under the Steward Health Care System network. Saint Anne's plans to offer an on-site diagnostic laboratory, X-ray, ultrasound, CAT scan and EKG services at the Riverside location and expects the center will be open from noon until midnight seven days a week.

The center will be a middle ground between emergency room and doctor's office, offering walk-in out-patient care for non-life-threatening conditions or when a patient's primary care doctor is unavailable.

The tax increment financing plan — which the City Council is scheduled to vote on tonight — would slash the new facility's tax bill by 90 percent in 2014. The benefit then drops by 10 percent annually for four more years, meaning the developer will pay 20 percent of the facility's assessed tax value in 2015 and eventually will pay 50 percent by 2018.

A TIF is an agreement between a developer and the community in which tax breaks for a period of five to 20 years are granted in exchange for local investment and job creation, according to the website of the Massachusetts Department of Housing and Economic Development.

The developer must still pay the property's total "base value" taxes — the plot's worth before the new building is factored in. For example, the St. Anne's property's 2014 "base value" is estimated to be $323,000, meaning the developer will owe $9,541 in taxes on it. The "new investment," the urgent care center, will add $1,365,000 in property value, resulting in $40,322 in new taxes for a total bill of $49,864 that year.

The TIF proposal would cut the new investment taxes so that 2014's bill would be $13,574 — the base plus 10 percent of the $40,322 new investment taxes.

Dickinson will pay 100 percent of its property taxes after the fifth year.

Those figures are based on projected calculations provided by the developer to the city as part of the TIF application. The developer wrote in the application that the medical center will create 34 permanent full-time positions and expects 75 construction jobs will be created while it is being built. Dickinson said that he needs the tax benefit because of the high ($1.1 million cost) of the one-acre parcel combined with $230,000 he had to spend to install utility connections.

Some city councilors hailed the Saint Anne's proposal as good for job creation in the city and At-Large Councilor Debora Coelho said she expects the measure to pass. "There's a creation of jobs, local jobs. This kind of encompasses what people want to see this council do, community development and jobs, jobs, jobs," Coelho said.

Ward 2 Councilor Steven Martins — who represents the Riverside Landing area — said the jobs created by the project sold him on the idea of letting Dickinson have a tax break.

Ward 5 Councilor Jane Gonsalves also called the TIF "a good idea" because it will spur investment in the city.

At-Large City Councilor-elect Linda Morad said that she's "not sure" there is a downside to TIFs if they are handled properly and monitored to ensure they're creating jobs. But she said that if the TIF does not create jobs then it can strain taxpayers, who have to make up the difference, without delivering anything in return.

"If you give someone a tax break, someone has to pay for it," she said.

If the council votes yes, the New Bedford Economic Development Council will work with the Massachusetts Office of Business Development to secure state approval, interim EDC Executive Director Derek Santos said.

TIF agreements — which provide $2.2 billion in benefits statewide — have drawn fire from State Auditor Suzanne Bump recently. Bump has asked the Legislature for the power to see business' tax returns so her office can audit whether they are abiding by their TIF proposals.

That proposal is opposed by the Boston and New Bedford chambers of commerce and other industry groups, who said there are safeguards in place already and that businesses would be hesitant to allow private information to become public — meaning they might go to other states.

TIF recipients have to report job creation and investment figures annually and the agreement can be de-certified by the state if the company does not hold up its end of the agreement, Santos said.

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